Financial advisors are reporting that an increasing number of baby boomers are using retirement savings to start new businesses. In fact, experts say that of the 600,000 new businesses started each year, nearly 10 percent are funded by 401(k)s and IRAs in what is known as a rollover business startup.
Many boomers are using retirement savings because of the lack of available private capital for funding startups, particularly for those who may have no track record of running a business. Rolling retirement savings over into a new business can be tricky, however, and requires that the new company have a retirement plan that complies with federal rules for such a transaction.
An Orange County business planning attorney can help you ensure your new business meets these rules, as well as provide valuable assistance in helping you make other decisions about your new California business:
Business plan. Your top priority should be to develop a comprehensive business plan that will spell out what products or services you will be offering, market analysis, pricing, financing, location and financial projections.
Business structure. You have several choices in deciding on the right business structure for your start-up, including sole proprietor, partnership, limited liability company (LLC) or corporation. This is when a consultation with a California business planning attorney is necessary, especially if you have personal assets you wish to shield from any potential business liabilities.
Business name. A California business planning attorney can also be helpful once you have chosen a name for your business. You should register your name as a DBA in the county where your business is based. You will likely want to trademark your name as well.
Business permits and tax documents. You may need to acquire a city business license (different cities have different rates and some are more favorable than others), a federal and state employer identification number, and a number of other documents. If you plan to lease a location, you should have your attorney review your commercial lease agreement.
Business insurance. Depending on what kind of business you plan to operate, you may need to secure liability insurance for your business.
For more information on starting a new business in California, contact our Orange County business planning law firm.
Get started by contacting our Orange County asset protection estate planning law firm as soon as possible.